DORIAN LPG - Investor Presentation
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Presentation
DORIAN LPG
June 2019
Disclaimer
Forward-Looking Statements
This presentation contains certain forward-looking statements including analyses and other information based on
forecasts of future results and estimates of amounts not yet determinable and statements relating to our future
prospects, developments and business strategies. Forward-looking statements are identified by their use of terms
and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,”
“will” and similar terms and phrases, including references to assumptions. The forward-looking statements in this
presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management’s examination of historical operating trends, data contained in our records
and other data available from third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant uncertainties and contingencies that are
difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections.
Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of
the underlying assumptions or expectations proves to be inaccurate or is not realized. Our actual future results may
be materially different from and worse than what we expect. We qualify all of the forward-looking statements by these
cautionary statements. We caution readers of this presentation not to place undue reliance on forward-looking
statements. Any forward-looking statements contained herein are made only as of the date of this presentation, and
we undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.
2
Dorian LPG at a Glance
US-Based with a Global Presence
Dorian LPG is a liquefied petroleum gas (LPG)
shipping company and a leading owner and
operator of modern very large gas carriers
(VLGCs) Copenhagen
London
Stamford Athens
The Company provides in-house commercial and
technical management services for all of the
vessels in the fleet
Singapore
Large commercial footprint with 19 vessels
currently employed in the Helios LPG Pool, which Current VLGC Fleet Age Profile1
operates 28 vessels total and is owned jointly with 12.0
Phoenix Tankers
10.0 9.6
Modern, fuel-efficient fleet comprised of 19 ECO- 8.0
VLGCs and three modern VLGCs, in addition to
years old
one chartered-in 2018-buily ECO-VLGC 6.0
4.9
Average age of owned fleet is 4.9 years vs. 4.0
global fleet average age of 9.6 years1
2.0
-
Dorian LPG Global Fleet
Source: CRSL
1. Excludes Dorian’s chartered-in vessels; global fleet excludes ethane carriers 3
Investment Highlights
Dorian LPG is a Market Leader in LPG Transport LPG Transport Market is Recovering from Cyclical Lows
Best in class fleet supports superior cash flow Global NGL Production & Exports Continue to
potential Increase
• Dorian’s fleet of 22 VLGCs has an average age of 4.9 • U.S. and Arabian Gulf seaborne exports remain steady
years vs. the global average of 9.6 years1
• U.S. NGL production is pushing record levels, showing
• ECO vessels’ fuel efficiency translates to superior few signs of slowing down
earnings power vs. peers
• New North American fractionation and export capacity
• The Company has committed for up 10 hybrid scrubbers should increase LPG production and facilitate increased
and is well positioned for IMO 2020 exports
Large commercial platform offers customer flexible Asian LPG Demand Remains Strong
solutions • Propane maintains a competitive price advantage as a
• Dorian LPG is one of the three largest operators of VLGC feedstock in Asia vs. Naphtha
tonnage globally • A wave of new chemical and PDH plants are planned and
• Including the Helios LPG Pool, Dorian commercially are under construction globally
manages 32 vessels1 • LPG retail use continues to grow in India and rural China
• Scale allows for a mix of spot, COAs, and time charters
Improved Fleet Utilization Reflects Manageable
Well-capitalized to perform through the VLGC Orderbook
shipping cycle • Global fleet utilization has also improved meaningfully
• Cash position of $66.5mm, including restricted cash, as of • Orderbook-to-fleet remains stable at ~13%
March 31, 2019.
• The costs of IMO 2020 are expected to increase vessel
• Over 90% of Company debt is fixed at attractive rates vs. scrapping
market
• No refinancing required until 2022
1. Excludes chartered-in vessels 2. In addition to 28 VLGCs in the Helios LPG Pool, Dorian LPG owns four vessels that are on long-term time charter
4LPG Market Fundamentals
The Basics . . .
What is LPG? The LPG Value Chain
• Liquefied petroleum gas ("LPG") is Gas production (~60%) LPG shipping Retail (~52%)
a combination of C3 (propane) and
C4 (butane)
• Both are natural gas liquids Chemical (~23%)
(“NGLs”) and are a byproduct of oil
and natural gas production
• These molecules are extracted or Oil production (~40%)
fractionated through natural gas Industrial (~10%)
processing and oil refining
Engine fuel (~8%)
Why Use LPG?
• LPG is cleaner than coal and oil;
as an alternative fuel it can remove
sulfur and particulate exhaust, Refinery (~5%)
reducing greenhouse gas
emissions
• LPG is also highly portable,
Other (~2%)
making it a convenient source of
energy usable in remote places
where ordinary gas supplies are
unavailable or have been
interrupted
Source: WLPGA
6Seaborne LPG Trade Flows
Major VLGC Trade Routes
= major exporter
= major importer
Longer Trade Routes Favor Larger VLGCs
Very Large Gas Large Gas Medium Gas Handysize
Carrier “VLGC” Carrier “LGC” Carrier “MGC”
78K – 84K cbm 50K – 60K cbm 18K – 42K cbm 2K – 22K cbm
7Global LPG Supply
Seaborne LPG Volumes Continue to Grow
Global Liftings Remain Up 17%
100 2019
95.0 YTD
95 92.5
90.6 34.8 MT
90
85.4
85
MT
80 + 17%
75.1
75
70 29.7 MT
65 63.0
2018
60
YTD
2013 2014 2015 2016 2017 2018
U.S. Waterborne Exports Up 21% Arabian Gulf Waterborne Exports Up 5%
35 32.7 2019 40 39.2 38.9 2019
YTD YTD
29.7
30 36.7 36.7
25.4 11.9 MT 13.0
34.8
25 35 MT
20.5
32.1
MT
MT
20
+ 21% + 6%
15 13.9 30
9.5 12.3
10 9.9 MT
MT
5 2018 25 2018
2013 2014 2015 2016 2017 2018 YTD 2013 2014 2015 2016 2017 2018 YTD
Source: IHS Waterborne
Note: YTD values shown through April 30, 2019
9U.S. LPG has Increased Global Market Share
A New Era of Supply
• The U.S. has emerged as the largest exporting nation,
forcing price competition amongst all suppliers
• U.S. export growth has surprised to the upside –
exports are up 21% Y/Y
• The Asian markets have become increasing reliant on
U.S. LPG exports
Seaborne LPG Exports by Origin
100%
11% 10% 7%
15% 14% 13%
8%
8% 8%
80% 8% 11% 10% 10%
10% 11%
11% 10% 10%
60%
41%
43% 40%
43%
40% 51% 46%
20%
32% 34%
24% 28%
15% 18%
-
2013 2014 2015 2016 2017 2018
US MEG N. Sea Med Others
Source: IHS Waterborne
10Evolving U.S. NGL and LPG Seaborne Trade Flows
Ethane and Butane Fueling Seaborne NGL Export Growth
1,400 +17% • In 2018, U.S. NGL exports
- 2%
increased 17% Y/Y, excluding
1,200
+29% Canada and Mexico
1,000
• In the same year, propane exports
Mbbl/d
800
increased, growing 11% in 2018
600
400 • Butane and Ethane exports were
200 up, showing Y/Y of 29% and 44%,
respectively
-
J-16 A-16 J-16 O-16 J-17 A-17 J-17 O-17 J-18 A-18 J-18 O-18 J-19
• February 2019 YTD NGL exports
Ethane Propane Butane were 2% below the 2018 average
U.S. VLGC Cargoes to Asia Remain Resilient Despite China Tariffs
2018 YTD 2019 YTD • Arbs to the east were positive for
the majority of 2018, allowing
Chinese bound cargoes to easily
be diverted elsewhere in Asia
Europe Americas
Europe Americas
17.1% 26.9% • 2019 arbs to the east remain
18.3% 27.9% strong
SE Asia Africa
SE Asia
4.3% Africa
7.6% 1.4% • Chinese PDH and other Asian
India 0.3%
cracking demand are expected to
0.6%
India outstrip incremental Middle
3.2% Eastern supply, and force suppliers
Far East
Far East to look West, boosting ton miles
48.5%
43.8%
Source: EIA, IHS Waterborne
Note: YTD values shown through April 30, 2019 11U.S. LPG Expected to Remain Price Competitive
Growing U.S. Propane Production Continues at Record Volumes
2.2
• December 2018 marked record
propane production of 2.1 MMbbl/d
2.0
• 2019 YTD production has
averaged 2.0 MMb/d – 10.0%
MMbbl/d
1.8
above 2018 YTD average of 1.8
1.6 MMb/d
1.4 • Growing oil production in the
Permian and Mid-Continent are
1.2 likely to push NGL production
J F M A M J J A S O N D higher
5-yr Range 2019
• Appalachian wet gas production
also continues to grow
Building Inventories Encourages Near-Term Propane Exports
• U.S. propane inventories have
120 remained elevated; despite recent
draws, inventories have begun to
100
build again
80
MMbbl
• Mont Belvieu pricing increasingly
60 reactive to international propane
prices, making U.S. volumes
40 increasingly competitive for export
20
J F M A M J J A S O N D
5-yr Range 2019
Source: EIA
Note: YTD through May 17, 2019
12More North American LPG Export Capacity is Coming
5.7 MTPA of Incremental Export Capacity in 2020, Translates to an Additional 11-12 Monthly VLGC Cargoes
45 42.9 44.5 44.5
40 37.4
35 31.7
30.8
30 25.9
MT
25 21.0
20
14.8
15
9.3
10
5
2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E
USGC Atlantic Pacific
North American LPG Export Capacity Currently Stands at >90% Utilization
• Corresponding domestic demand growth appears unlikely, necessitating increasing exports to clear the market
• Energy Transfer’s Mariner East II began service in late 2018 and is expected to add three to four monthly VLGC cargoes
initially, growing to seven to eight by 2021
• Enterprise’s expansion of its Houston export facility is expected to come online by 2H19, adding capacity for an additional
8-9 VLGCs per month
• Ridley Island in British Columbia was commissioned recently and is expected to average two VLGC cargoes per month
Source: IHS Waterborne, Company documents, Dorian LPG Estimates
13
13New Fractionation Should Push U.S. LPG Production Higher
1.3 MMbbl/d of Additional Frac Capacity is Planned through 2020
Company Project Location Throughput Est.
(Mbbl/d) Completion
Lone Star NGL Fractionator VI Mont Belvieu 150 In Service
Targa Resources Train 6 Mont Belvieu 100 In Service
Enterprise Products Frac 10 Mont Belvieu 150 1Q20
Epic Midstream Robstown Expansion Corpus Christi 100 1Q20
Lone Star NGL Fractionator VII Mont Belvieu 150 1Q20
Oneok MB 5 Mont Belvieu 125 1Q20
Targa Resources Train 7 Mont Belvieu 110 1Q20
Targa Resources Train 8 Mont Belvieu 110 2Q20
Permico Energia El Centro I Corpus Christi 150 4Q20
Permico Energia El Centro II Corpus Christi 150 4Q20
Phillips 66 Sweeny Hub 2 Freeport 150 4Q20
Phillips 66 Sweeny Hub 3 Freeport 150 4Q20
Major Gulf Coast Processing Constraints Should Begin to Ease by 2H19
• U.S. NGL production is growing at a record pace, but limited fractionation capacity has
constrained purity product growth
• Growing fractionation capacity at Mont Belvieu should allow midstream players to
fractionate more Y-grade product into purity propane and butane for export at lower
prices
• New capacity at Corpus Christi and Freeport will largely serve Permian volumes
Source: Company Reports
14LPG Demand and Consumption
Growing LPG Markets: China
Tariffs Have Marginally Impacted Chinese LPG Imports
20.0
18.8
18.3
18.0
15.9
16.0
14.0
11.9
12.0
MT
10.0
8.0
6.9
6.0
4.6
4.2 3.9
4.0
2.0
-
2013 2014 2015 2016 2017 2018 2018 Mar YTD 2019 Mar YTD
Source: Bloomberg
16China Continues to Drive Asian LPG Demand
Chinese LPG Demand Outlook Remains Favorable
• On 23 August 2018, Beijing placed a 25% tariff on U.S. LPG in response to American tariffs on Chinese exports
• Residential LPG is still required as a substitute for coal in more remote areas, where piped gas infrastructure is too costly to
install, but chemicals should account for a growing share of China’s LPG demand, especially with the nation’s rapidly expanding
petrochemical complex
• The EIA estimates that Chinese Petchem demand will rise to a total of more than 21 MTPA by 2024
• Although no new PDH plants started up in China in 2017, Zhejiang Satellite’s 0.5 MTPA expansion is in service and the 0.7
MTPA Fujian Meide plant is expected to start up in 2H19
• State-owned refiners are also starting up an estimated 3.7 MTPA of alkylation units, which should reduce refinery supplies of
butane currently sold to stand alone deep-processing units and increase the need for imports
China Has Largely Substituted U.S. LPG with MEG Volumes
100%
22% 24% 23%
33% 29%
80%
7%
15% 19%
60% 8% 19%
18% 12%
43% 20%
13%
40% 16%
10% 14%
7% 19%
11% 8% 10%
20%
6% 24% 14%
21% 18%
10% 6%
-
2014 2015 2016 2017 2018
U.S. SA UAE Iran Qatar Others
Source: IHS Waterborne, EIA
17A Second Wave of New Chinese PDH Plants
Nine Planned Projects are Expected to add 6.5 MTPA of LPG Demand through 2022
Company Throughput Est. • Chinese PDH margins averaged ~$380/ton in 2018 and have
('000 tons) Completion been operating at high utilization rates since 2017
Satellite Petrochemical 540 In Service
Soft Packaging 792 2019 • Domestic Chinese LPG production from deep processing
appears to be decreasing
Ju Zhen Yuan 720 2019
Oriental Energy #1 792 2020 • LPG production from oil refineries has decreased since 2016
Rongsheng 720 2020
Wanda Petrochemical 600 2020 • Ongoing government rationalization of refineries may also
Oriental Energy #2 792 2021 decrease domestic LPG production even further over the next
Oriental Energy #3 792 2021
several years
Rongsheng 720 2022
Hongji Petrochemical 540 2022
Projected Chinese Propane Demand Growth from New PDH Plants
2.5
2.1 2.1
2.0
1.6
1.5 1.3
MTPA
1.0
0.5
-
2019E 2020E 2021E 2022E
Source: Wanhua Petrochemical
18The LPG Nation: India
Indian LPG Demand is Steadily Increasing
13.0
11.9 12.1
12.0
11.0 10.2
10.0
8.9
9.0
8.1
8.0
7.0
MT
6.0
6.0
4.9
5.0
4.0 3.5
3.0
2.0
1.0
-
2013 2015 2016 2016 2017 2018 2018 Apr YTD 2019 Apr YTD
Government Policies and Infrastructure Development to continue Boosting Consumer Adoption
• Following Modi’s landslide victory, It is expected that the Indian government will continue implementing strong-demand driven
policies, which will benefit LPG penetration and demand growth – Government targeting 80m household connections by 2020.
• The latest Petroleum Planning and Analysis Cell (PPAC) data reveals that total LPG consumption recorded a growth of 11.1%
during January 2019 and a cumulative growth of 5.7% for the January-April period.
• The government forecasts annual LPG demand to grow by 11%-12% over the next five years.
• LPG infrastructure spending continues unabated, with GAIL recently announcing the revival of a pre-existing LPG plant at Usar
in Maharashtra (western India). GAIL plans to revamp the Usar facility by converting it into a Propane Dehydrogenation (PDH)
plant, which will produce 0.5 Mtpy of polypropylene. This 8 million rupee project, due for commissioning in 2024, will be India’s
first PDH plant.
Source: Bloomberg, Energy Aspects, Petroleum Planning and Analysis Cell (PPAC)
Note: YTD values shown through April 30, 2019
19LPG Cracking Capacity Should Boost Demand
A New Wave of Asian Cracking Capacity is Planned FE Propane / Naphtha Spread Has Widened
2015 2016 2017 2018 2019
Company Location LPG Required
-
('000 tons) Est. Completion
Titan Chemicals (expansion) Malaysia 75 In Service $(10)
Lotte Chemical (Yeosu) S. Korea 444 In Service $(20)
Hanwha Total Petrochemical S. Korea 689 2019 $(19)
$(22)
$(30)
LG Chem S. Korea 1,123 2019
SP Chemicals China 932 2020 $(40)
per MT
Wanhua Chemical China 2,222 2020 $(50)
Sinopec China 688 2020
$(60)
Gulei Petrochemical China 717 2020 $(58)
YNCC S. Korea 102 2020 $(70) $(65)
JG Summit (expansion) Philippines 140 2021 $(80)
LG Chem S. Korea 758 2021
$(90)
Hyundai Chemical S. Korea 187 2021
GS Caltex S. Korea 219 2022 $(100) $(95)
SCG Chemical Vietnam 867 2022
Note: Negative spread denotes LPG is cheaper than naphtha
Source: FGE, Bloomberg
20Korean Cracking Demand Expected to Double Over Ten Years
Korean PDH + Flexi Cracker Expansions New Steam Crackers Growing LPG Demand
Daesan Complex • South Korea Currently has 4.1 MTPA of current
cracking capacity
• LG Chemical
• Lotte Chemical
• HTC • Planned South Korean LPG cracking capacity
• Hyundai Oilbank additions and expansions are expected to add 7.3
MTPA of demand by 2023
• South Korean supply diversification should help
Ulsan Complex boost U.S. cargoes vs. MEG cargoes
• SKG Chemical
• KPIC • Represents significant ton-mileage expansion
• S-Oil
Yeosu Complex
• LG Chemical
• Lotte Chemical
• YNCC
• GS Caltex
Source: SK Gas
21Dorian LPG
A Premium Fleet, Well Prepared for IMO 2020
Young Fleet Allows for a Flexible Approach Towards Compliance
Vessel Name Built Retrofit Scrubber Scrubber
Capable Ready Installed
Caravelle 2016 ✓ • Corvette and Concorde are already scrubber equipped
Challenger 2015 ✓
Copernicus 2015 ✓ ✓ • Dorian LPG has announced the purchase of 10 hybrid scrubbers
Chaparral 2015 ✓ from Clean Marine A/S and Pure Ocean Technology; installation is
Commander 2015 ✓ ✓ expected during calendar 2019 and 2020
Cratis 2015 ✓ ✓ • The Company has been at the forefront of evaluating LPG as a
Cheyenne 2015 ✓ marine fuel, completing a feasibility study with the American Bureau
Clermont 2015 ✓ of Shipping and signing a letter of intent with Hyundai Heavy Global
Constellation 2015 ✓ ✓ Services for the upgrade of up to ten vessels
Cresques 2015 ✓ ✓
• Current LPG-HFO fuel cost differential does not fully support the
Commodore 2015 ✓
Constiution 2015 ✓ investment required to retrofit vessels for use of LPG as a primary
Continental 2015 ✓ marine fuel, but prospects are expected to improve post IMO 2020
Cobra 2015 ✓ • Sixteen of Dorian LPG’s Eco VLGCs were built with strengthened
Concorde 2015 ✓ ✓ decks to accommodate LPG fuel deck tanks in anticipation of
Cougar 2015 ✓ potential LPG engine upgrades.
Corvette 2015 ✓
Corsair 2014 ✓
Comet 2014 ✓
Capt. Nicholas ML 2008
Capt. John NP 2007
Capt. Markos NL 2006
Eco Modern
23An Early Adopter of Scrubber Technology
Four Years of Technical and Commercial Experience Operating Scrubbers Systems
• Corvette and Concorde were equipped with scrubbers at delivery in 2015
• Dorian LPG has had a head start, employing both a hybrid system and an enhanced open loop system (both VGP compliant)
• Scrubber systems add incremental complexity to vessels’ technical and operational management
• Experience integrating scrubber systems into vessel operations has prepared Dorian LPG to add ten additional scrubber
systems to its fleet with marginal disruption
• Installation is planned to coincide with previously scheduled drydocking reducing vessel offhire and overall installation costs
Hybrid (Open and Closed Loop) System Open Loop Systems are Simple in Comparison
Emission Emission
Monitoring Monitoring
System System
Alkali
Dosing
Heat
Exchanger
Water Water
Water
Treatment Monitoring
Monitoring
Process Unit Unit
Tank
Water Holding Water
Intake Tank Intake
24The Leading VLGC Commercial Platform
Dorian LPG Commercially Controls 32 Vessels1
Helios LPG Fleet Composition1
• The Helios LPG Pool is a 50/50 partnership between Dorian 20 19
LPG and Phoenix Tankers, a subsidiary of MOL of Japan
15
• The primary goal of the Pool is to create a critical mass of
reliable and efficient VLGCs to allow Helios to provide the
vessels
most dependable global LPG maritime solution. Offering 10
spot freight, TCs, and COAs facilitates flexibility and
affordability, while optimizing earnings for all partners
5 4
3
2
• Earnings are allocated to each vessel participating in the
Pool based on “Pool Points,” which are awarded based on -
vessel characteristics such as carrying capacity and fuel Dorian LPG Phoenix Astomos Clearlake
consumption over the relevant period Tankers
1. Dorian LPG jointly operates 28 vessels in the Helios LPG Pool
25Dorian LPG is a Leader in Fuel Efficiency
Average Fuel Consumption by Vessel Profile1 Dorian LPG’s Fleet Composition
65 63.0 • 19 Korean-built fuel-efficient Eco
60.0
60 58.5
57.3 VLGCs with an avg. age of 3.8
54.0 years
55
MT / day
49.5
50 46.5
48.0 • 3 HHI-built Non-Eco built VLGCs
45.0
45 with an avg. age of 11.9 years
41.0
40
• Modern fuel-efficient vessels
35 offer a substantial earnings
Korean Eco Chinese Eco HHI Modern DSME Modern Japanese
Legacy advantage relative to older
tonnage
Laden Ballast
Estimated Annual Fuel Cost by Vessel Profile1,2
$12.0 $10.7 $10.3
$10.0 $9.0
$8.5 $8.4 $8.1
$7.6
$8.0 $7.1
$6.7
millions
$6.0 $6.1 $5.9
$6.0 $4.8 $5.1
$4.3
$4.0
$2.0
-
Korean Eco Chinese Eco HHI Modern DSME Modern Japanese Legacy
$400 / MT $550 / MT $700 / MT
Source: Dorian LPG management estimates
1.
2.
Eco denotes vessels built after 2014; Modern denotes vessels built 2006-2013, legacy denotes vessels built in the early 2000s
Basis Ras Tanura to Chiba: 16kt speed ballast and laden; 36.6 sailing days roundtrip, split evenly ballast and laden; 252 days/year; Japanese vessels sail 15kt laden, 37.9 sailing days roundtrip 26VLGC Shipping Market Dynamics
Current VLGC Spot Rates Recovering from Near Historic Lows
Baltic VLGC Daily Spot Rates
$60K
$50K
$40K
TCE / day
$30K
$20K
$10K
-
F-16 A-16 J-16 A-16 O-16 D-16 F-17 A-17 J-17 A-17 O-17 D-17 F-18 A-18 J-18 A-18 O-18 D-18 F-19 A-19
Baltic TCE/Day Baltic TCE/Day (4 week trailing avg.)
Rate Commentary Fleet Utilization Has Followed Rates Higher
• Houston-to-Chiba has climbed above $80 PMT, while 100%
Ras Tanura-to-Chiba now stands at more than $60 PMT
90%
90% 88% 88%
• OPEC cuts and Iranian sanctions have increased demand
84%
for US export volumes, growing ton-mile demand
80% 77%
• Spot rates are now above $45,000/day vs. a low of
$7,000/day last calendar quarter
70%
1Q18 2Q18 3Q18 4Q18 1Q19
Source: Baltic Exchange, Clarksons, DNB
28Vessel Supply Remains Balanced
Recent VLGC Deliveries and Current Orderbook
50 • Orderbook-to-fleet stands at ~13%
40 • Increasing output from the U.S. and Ichthys should be
enough to absorb near-term deliveries
30
vessels
• Asian buyers will increasingly look to diversify supply
20 away from Iran, likely having a positive effect on
utilization and minimizing the impact of new tonnage
10 11
35 41 21 8 6 20
-
2015 2016 2017 2018 2019E 2020E
Delivered On Order
VLGC Fleet Age Profile and Potential Scrapping
140
122
• 6 VLGCs were scrapped in 2018
120 o 1 ship in 1Q18 (28 yo)
o 3 ships in 2Q18 (avg. age of 32 yo)
100
o 1 ship in 3Q18 (27 yo)
o 1 ship in 4Q18 (28 yo)
vessels
80
58
60
• 31 potential scrapping candidates, represent ~12% of
40 32
26
the current fleet
25
20 8 • IMO 2020 regulations expected to accelerate
- scrapping pressure in the near term as compliant fuelFinancials
Enhancing Balance Sheet Strength & Flexibility
Since November 2017, Dorian LPG Has Completed Six Japanese Financing Arrangements
• Generating additional liquidity of approximately $63.3 million
• Lengthening of debt maturities
o 3 ECO VLGCs with maturities in 2029-2031 (12-13 year tenors)
o 3 “Captains” with maturities in 2024-25 (6-7 year original tenors)
• Fixed interest rates on the ECO VLGCs of 4.9% and on the Captains at 6.0%
• Very attractive age-adjusted profiles
• No financial covenants
Over 90% of Company Debt is Either Fixed or Hedged; Our Current Total Cost of Debt is ~4.3%1
The Company has no refinancing requirements until 2022
1. As of March 2019
31Statement of Operations (USD)
Three Months Ended Three Months Ended
Statement of Operations Data March 31, 2019 March 31, 2018
(Unaudited) (Unaudited)
Revenues 34,467,366 39,034,678
Voyage expenses (875,265) (312,170)
Charter hire expenses (237,525) —
Vessel operating expenses (16,046,204) (15,892,536)
Depreciation and amortization (16,068,079) (16,105,764)
General and administrative expenses (5,665,250) (6,694,250)
Professional and legal fees related to the BW Proposal (2,311) —
Other income—related parties 635,817 643,489
Operating income/(loss) (3,791,451) 673,447
Interest and finance costs (10,122,260) (10,894,624)
Realized gain on derivatives 1,293,291 89,838
Other income/(expenses), net (3,333,155) 6,665,344
Net loss (15,953,575) (3,465,995)
Other Financial Data
Time charter equivalent rate (1) 18,883 24,695
(2)
Daily vessel operating expenses 8,104 8,027
(3)
Adjusted EBITDA 14,138,194 18,237,423
(1) Our method of calculating time charter equivalent rate is to divide revenue net of voyage expenses by operating days for the relevant time period.
(2) Calculated by dividing vessel operating expenses by calendar days for the relevant time period.
(3) Represents net income excluding unrealized gain/(loss) on derivatives, interest and finance costs, stock-based compensation expense, impairment, and depreciation and
amortization expense and is used as a supplemental financial measure by management to assess our financial and operating performance.
32Statement of Operations (USD)
Year Ended March 31, Year Ended March 31,
Statement of Operations Data
2019 (Audited) 2018 (Audited)
Revenues 158,032,485 159,334,760
Voyage expenses (1,697,883) (2,213,773)
Charter hire expenses (237,525) —
Vessel operating expenses (66,880,568) (64,312,644)
Depreciation and amortization (65,201,151) (65,329,951)
General and administrative expenses (24,434,246) (26,186,332)
Professional and legal fees related to the BW Proposal(4) (10,022,747) —
Other income—related parties 2,479,599 2,549,325
Operating income/(loss) (7,962,036) 3,841,385
Interest and finance costs (40,649,231) (35,658,045)
Realized gain/(loss) on derivatives 3,788,123 (1,328,886)
Other income/(expenses), net (6,122,761) 12,744,860
Net loss (50,945,905) (20,400,686)
Other Financial Data
Time charter equivalent rate (1) 21,746 21,966
(2)
Daily vessel operating expenses 8,329 8,009
(3)
Adjusted EBITDA 64,408,989 74,515,790
(1) Our method of calculating time charter equivalent rate is to divide revenue net of voyage expenses by operating days for the relevant time period.
(2) Calculated by dividing vessel operating expenses by calendar days for the relevant time period.
(3) Represents net income excluding unrealized gain/(loss) on derivatives, interest and finance costs, stock-based compensation expense, impairment, and depreciation and
amortization expense and is used as a supplemental financial measure by management to assess our financial and operating performance.
(4) Reflects legal, investment banking, and other advisory fees. Excluding the costs, EBITDA would have been $67.3 mm and net loss $(40.9)mm for the year ended March 31, 2019
33Statement of Cash Flows (USD)
Three Months Ended Three Months Ended
Cash Flows Data March 31, 2019 March 31, 2018
(Unaudited) (Unaudited)
Net loss (15,953,575) (3,465,995)
Adjustments 21,863,251 13,964,893
Changes in operating assets and liabilities 7,371,547 5,803,955
Net cash provided by operating activities 13,281,223 16,302,853
Net cash used in investing activities (1,316,305) (134,198)
Net cash provided by/(used in) financing activities (16,063,526) 28,573,485
Effects of exchange rates on cash and cash equivalents (11,578) (90,009)
Net increase/(decrease) in cash and cash equivalents (4,110,186) 44,652,131
Year Ended March 31, Year Ended March 31,
Cash Flows Data
2019 (Audited) 2018 (Audited)
Net loss (50,945,905) (20,400,686)
Adjustments 81,885,490 65,516,838
Changes in operating assets and liabilities (22,056,152) 12,132,951
Net cash provided by operating activities 8,883,433 57,249,103
Net cash used in investing activities (4,520,304) (437,037)
Net cash provided by/(used in) financing activities (67,005,777) 4,671,658
Effects of exchange rates on cash and cash equivalents (253,086) (8,042)
Net increase/(decrease) in cash and cash equivalents (62,895,734) 61,475,682
34Balance Sheet (USD)
March 31, 2019 March 31, 2018
Balance Sheet Data
(Audited) (Audited)
Cash and cash equivalents 30,838,684 103,505,676
Restricted cash, non‑current 35,633,962 25,862,704
Total assets 1,625,370,017 1,736,110,156
Total debt including current portion – net of deferred financing fees of $14.0 million
696,090,786 759,103,152
and $16.1 million as of March 31, 2019 and 2018, respectively.
Total liabilities 712,687,459 776,696,794
Total shareholders' equity 912,682,558 959,413,362
35Appendix
IMO 2020 Fuel Options
Distillate or
High Sulfur Fuels Alternative Fuels New Fuels
Blended Fuels
ULSGO 0.1% S,
Type ULSFO 0.5% S
HSFO 3.5% S LNG / LPG / Ethane Hybrid, Bio, GTL, New
Newbuilding or with
Requirements Tank Cleaning with scrubbers only engine retrofit for dual N/A
fuel
No product yet and no Available, but not easy
Availability ISO standard
Available
to source
Experimental stage
Compliant and greener
Compliant operation
Pricing; no operational solution with lower
Pros with no capex or
change required green house gases
Green solution
modifications
and nitrous oxides
Capex; new marine Higher installation
Pricing; blended mix of
application on vessels; capex; re-supply Not commercially
Cons fuels and treated fuel
new compliance issues; storage available
oils
regulations considerations
37You can also read
